The 2024 US election takes place tomorrow (Tuesday 5 November 2024). And as anxious Americans wait to see the state of their nation’s democracy, the rest of the world waits with bated breath, too. Including South Africa …
According to the NY Times, 75 million people have cast early ballots and projections indicate an expected voter turnout of between 60-70%. Remarkably, the two candidates for the 2024 US election – former president Donald Trump and current Vice President Kamala Harris – are both polling at no more than 50% within their respective voter bases.
2024 US ELECTION
However, the result of the 2024 US election tens of thousands of kilometres away will impact economic policies in emerging markets (like South Africa), reports Business Tech. And the most immediate impact to South Africans will be in the rand. Annabel Bishop of Investec said last week that a Donald Trump victory in the 2024 US election will be the worst for the rand.
This is because his leadership style is one of protectionism, sanctions and zero care for ‘$h&thole countries in Africa’. The negative impact of a Republican win with Trump has already been seen on the rand before. While, alternatively, Democrat Harris has given no indication that economic policies will shift from those of the Biden administration.
RAND – DOLLAR EXCHANGE
After early gains in 2024, the rand has been on the back foot in the last quarter, averaging R17.53 to the dollar. “In particular, the rand lost ground when Donald Trump polled higher, on concerns of increased protectionism, tariffs and sanctions. South Africa has come under fire before from US tariffs when Trump was in the Whitehouse, while global economic growth and risk aversion can also negatively impact the rand,” explains Bishop.
However, extremely close interim polling for the 2024 US election indicates it could essentially come down to a coin flip. With the whole affair riding on just a handful of closely contested swing states. On top of US uncertainty, South African markets have been contending with shifting global sentiment towards interest rates. This is largely reflective of the tone set by the US Fed on interest rates, indicating there will be a much slower cutting cycle than expected after an initial 50 basis point cut back in September. Therefore, many foreigners sold off South African equities on a net basis in the month of October and the rand weakened as a result, hitting a high of R17.80 to the dollar.
WHO DO YOU WANT TO SEE WIN THE US ELECTION?
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